BES 001 Review

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BES 001

Reviewer

1. How long must a P40,000.00 note bearing 4% simple interest run to amount to
P41,350.00?
a.340 days
b.403 days
c.304 days
d.430 days

2. It is the amount of money earned by a given capital.


a. Capital
b. Interest
c. Future worth
d. Present worth

3. A hollow block making business can produce 15000 pieces a week. Their
operation manager determined that in order to achieve this production, they
need to spend P 90000 weekly on raw materials, electricity, labor and
transportation. The company also pays a fixed amount of P 10000 weekly.
Determine their profit if they run at 80% efficiency.
a. P 29960
b. P 35995.56
c. P 34677.80
d. P 35790

4. A man pays his debt in the following manner: P1000 after 1 year, 900 after
2 yrs., 800 after 3 years and so on up to 6th year. Find the accumulated
amount of these payments at the rate of 10% compounded annually.
a. P7000.00
b. P6000.88
c. P6000.00
d. 7997.89

5. Under this method, hourly rate of depreciation is calculated. It is the


cost of the asset (less residual value if any) is divided by the
estimated working hours.
a. Working Hours Method
b. Straight Line Method
c. Sum of Years Digit Method
d. Declining Balance Method

6. A machine costs P1.5M. It has a salvage value of P600000 at the end of its
economic life. What is the machine’s economic life if the book value at the
end of 2 years is estimated to be P948037.50 using declining balance method.
a. 3
b. 4
c. 5
d. 6

7. The first cost of a machine is P1800000 with a salvage value of P300000 at


the end of its life of 5 years. Determine the total depreciation after 3
years using Sum of Years Digit Method.
a. P1200000
b. P1670000
c. P966000
d. P842000
8. What is the formula for a straight-line depreciation rate?
100%−% 𝑛𝑒𝑡 𝑠𝑎𝑙𝑣𝑎𝑔𝑒 𝑣𝑎𝑙𝑢𝑒
a.
𝑒𝑠𝑡𝑖𝑚𝑎𝑡𝑒𝑑 𝑠𝑒𝑟𝑣𝑖𝑐𝑒 𝑙𝑖𝑓𝑒

100% 𝑛𝑒𝑡 𝑠𝑎𝑙𝑣𝑎𝑔𝑒 𝑣𝑎𝑙𝑢𝑒


b.
𝑒𝑠𝑡𝑖𝑚𝑎𝑡𝑒𝑑 𝑠𝑒𝑟𝑣𝑖𝑐𝑒 𝑙𝑖𝑓𝑒
% 𝑛𝑒𝑡 𝑠𝑎𝑙𝑣𝑎𝑔𝑒 𝑣𝑎𝑙𝑢𝑒
c.
𝑒𝑠𝑡𝑖𝑚𝑎𝑡𝑒𝑑 𝑠𝑒𝑟𝑣𝑖𝑐𝑒 𝑙𝑖𝑓𝑒

𝑎𝑣𝑒𝑟𝑎𝑔𝑒 𝑛𝑒𝑡 𝑠𝑎𝑙𝑣𝑎𝑔𝑒 𝑣𝑎𝑙𝑢𝑒


d.
𝑒𝑠𝑡𝑖𝑚𝑎𝑡𝑒𝑑 𝑠𝑒𝑟𝑣𝑖𝑐𝑒 𝑙𝑖𝑓𝑒

9. A man loans P187,400 from a bank with interest at 5% compounded annually.


He agrees to pay his obligations by paying 8 equal payments, the first being
due at the end of 10 years. Find the annual payments.
a. P98, 441
b. P44,981
c. P91,448
d. P44,891

10. A man borrows P 100,000 at 10% effective annual interest. He must pay back
the loan over 30 years with uniform monthly payments due on the first day of
each month. How much is the monthly payment?
a. P 870.00
b. P 846.00
c. P 878.00
d. P 839.00

11. A man borrowed P10,000.00 from his friend and agrees to pay at the end of
90 days under 8% simple interest rate. What is the required amount?
a. P11,200.00
b. P10,200.00
c. P9,500.00
d. P10,700.00

12. Consider a deposit of P600.00, to be paid up in one year by P700.00. What


are the conditions on the rate of interest, i% per year compounded annually,
such that the net present worth of the investment is positive? Assume i≥0.
a. 0 ≤ i < 16.7%
b. 0 ≤ i < 14.3%
c. 12.5% ≤ i < 14.3%
d. 16.7% ≤ i < 100%

13. If P1,000 becomes P1,811.36 after 5 years when invested at an unknown rate
of interest compounded bimonthly, determine the unknown nominal rate and
the corresponding effective rate, respectively.
a. 12%, 12.616%
b. 6%, 12%
c. 10%. 10.562%
d. 13%, 13.256%

14. Forty-eight years ago, one year of tuition at a certain university is P


1,990. Today, the cost is P 64,890. If the inflation rate is 3.87% per year,
which of the following is true regarding the present cost in relation with
the inflation rate?
a. the cost today has risen faster than the inflation rate
b. the cost today has risen slower than the inflation rate
c. the cost today has risen at the same rate with the inflation rate
d. no such association can be made from the given

15. A man purchased on monthly installment a P 100,000 worth of land. The interest
rate is 12% nominal and payable in 20 years. What is monthly amortization?
a. P 1,101.08
b. P 1,121.01
c. P 1,152.15
d. P 1,128.12

16. You need P 4,000 per year for four years to go to college. Your father
invested P 5,000 in 7% account for your education when you were born. If you
withdraw P 4,000 at the end of your 17th,18th, 19th, and 20th birthday, how much
would be left in the account at your 21st birthday?
a. P 2,400
b. P 2,500
c. P 1,700
d. P 4,000

17. It is an Annuity that has a fixed time span.


a. Capitalized Cost
b. Perpetuity
c. Annual Cost
d. Annuity Certain

18. What payment “x” ten years from now is equivalent to a payment of Php 1000.00
six years from now, if interest is 15% compounded monthly?
a. P560.50
b. P1815.35
c. P506.35
d. P1618.25

19. It is a social science concerned with the production, distribution, and


consumption of goods and services. It studies how individuals, businesses,
governments, and nations make choices about how to allocate resources.
a. Economy
b. Engineering Economics
c. Engineering Sciences
d. Economics

20. Some future amount F is equivalent to P2,000 being received every six months
over the next 12 years. The nominal interest rate is 20% compounded
continuously. Find the value of F.
a. P185,000
b. P187,000
c. P189,000
d. P191,000

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